Wow. Have you prepared a chart to back that up?When an increased allocation is used to reduce charges remember to add the extra to the charge taken.
€100
101% allocation
€101
Charges
1% levy
0.65%amc
€101 x 1.65% =1.665% charge rather than 1.65%
The phrase "sawing sawdust" comes to mind here perhaps.Wow.
Hi GerardOn every investment/savings contract there is a 1% Government Levy. That levy is on the investor/saver so it's an additional charge and equates to circa 0.15% per annum, as an entry charge, in a Key Investment Document (KID).
With some investments the product provider covers the cost of this by allocating an extra 1% to your investment.
You invest €10,000, the 1% Government Levy is deducted and paid to Revenue giving you a 'premium' of €9,900.
The 101% allocation is applied to this premium and that brings your investment back up to €10,000. That €10,000 is then used to buy units in the fund.
The 101% Allocation is generally stated on the policy schedule.
If the 1% Levy wasn't there, I think that we would have more competitive Annual Management Charges.
Gerard
www.bond.ie
Correct!...or is that managed by Zurich when the fund is eventually cashed in and the investor receives the final amount net of any taxes due so doesn't have to worry about filing tax returns ?
Current Fund Value (Before Tax): | |
Current Encashment Value (Before Tax): | |
Current Encashment Value (After Tax): | |
Maximum Partial Encashment Value (Before Tax): | |
Maximum Partial Encashment Value (After Tax): | |
Valuation Date: | 06/06/2023 |
Gerard ,If funds rise so you pay tax on a deemed disposal date and then the fund falls and you encash . …,Do you get the tax overpaid already refunded by Zurich ? Or from revenue and if so how !@meadow
The tax applicable is Life Assurance Exit Tax, not CGT. It's deducted by Zurich Life and paid to Revenue on your behalf.
At all times, on your online account dashboard, you will see your position in terms of:
Current Fund Value (Before Tax): Current Encashment Value (Before Tax): Current Encashment Value (After Tax): Maximum Partial Encashment Value (Before Tax): Maximum Partial Encashment Value (After Tax): Valuation Date: 06/06/2023
Gerard
Current Fund Value (Before Tax): | 158,841.62 |
Current Encashment Value (Before Tax): | 158,841.62 |
Current Encashment Value (After Tax): | 168,559.02 |
Maximum Partial Encashment Value (Before Tax): | 142,957.45 |
Maximum Partial Encashment Value (After Tax): | 151,703.11 |
Valuation Date: | 06/06/2023 |
The levy is deducted first, the additional allocation comes after. One of the life companies got the hump with me a number of years ago when I pulled them up on their assertion of giving an additional 1% allocation to cover the cost of the levy.Look, you said 1.65% becomes 1.665%. BTW I just notice that you meant 0.65% becomes 0.665%, a mistake which I actually followed.
But on the substantial point you made a boo-boo. 'Fess up like a man.
Maybe you're confusing it with a very, very minor discrepancy. If the 1% extra allocation is applied after the deduction of the levy rather than before then the initial fund is 99.99% of the investment. Nuffin' to do with AMCs.
One of the life companies got the hump with me a number of years ago when I pulled them up on their assertion of giving an additional 1% allocation to cover the cost of the levy.
Well, I guess it depends on whether the life company adds 1% of the premium net of the levy or 1 percentage point to that amount.The levy is deducted first, the additional allocation comes after. One of the life companies got the hump with me a number of years ago when I pulled them up on their assertion of giving an additional 1% allocation to cover the cost of the levy.
It's 1% to the amount net of the levy.Well, I guess it depends on whether the life company adds 1% of the premium net of the levy or 1 percentage point to that amount.
I assume it’s the later (in which case the life company would be correct in their assertion) but it really is a trivial difference either way.
There is a 1% tax on investments (and risk benefits) with life companies. So if you contribute €100, 1% is deducted in tax and €99 is invested.I feel like the guy on the bus talking about tracker mortgages - I don't understand this - what does it mean?
After tax greater than Before tax?@mtk
If you pay the tax and then funds fall the Zurich System system automatically calculates the overpaid tax and it's added back to your encashment value. So Zurich Life deal with that for you.
It would appear on your account like:
Current Fund Value (Before Tax): 158,841.62 Current Encashment Value (Before Tax): 158,841.62 Current Encashment Value (After Tax): 168,559.02 Maximum Partial Encashment Value (Before Tax): 142,957.45 Maximum Partial Encashment Value (After Tax): 151,703.11 Valuation Date: 06/06/2023
Gerard
www.bond.ie
After tax greater than Before tax?
Brilliant, I missed the clarification in the first post, went straight to the Table! I'm glad I didn't accuse you of doing a MarcAbsolutely, in the context of a drop in value after a deemed disposal transaction where tax was deducted on a higher valuation and is now due back to the client based on the current valuation.
Gerard
www.bond.ie
To avoid any confusion, and the subsequent references to 99.99%, I should have been explicit with my premium figure.You invest €10,000, the 1% Government Levy is deducted and paid to Revenue giving you a 'premium' of €9,900.